The holiday season is upon us, so that means our credit card use is shifting into high gear – and so is the risk of being ripped off or scammed. It’s worth reminding ourselves amid the shopping and travelling that our plastic is almost as good as cash and should be treated as such. Most of us carry more than one credit or debit card so that means extra vigilance as the loss of one may not be apparent immediately. And bear in mind that disputes over cards are common between consumers and banks, but you can avoid getting into such aggravation by noting our eight hacks.
HACK #1: TAKE STEPS TO SAFEGUARD YOUR CARDS
It seems obvious but you should take steps to safeguard your cards. Take a scenario where workmen arrive to service your air-conditioner, the same men who have visited before.
“While you have met these people before, you should always ensure that your credit cards are locked away, or else an adjudicator may find that you were negligent,” said the Financial Industry Disputes Resolution Centre (Fidrec).
“Similarly, when you have visitors in your house whom you may not be very familiar with (such as your children’s friends), you must keep your cards properly.”
Ms Choo Wan Sim, UOB’s head of cards and payments, Singapore, advises cardholders to always keep their cards in sight instead of leaving them in the possession of the merchant. She also encourages consumers to set SMS alerts based on regular spending habits and risk threshold
HACK #2: KNOW YOUR LIABILITY
In most credit card agreements between banks and customers, there is a term stating that the customer’s liability is limited to $100, if and only if all of the conditions stated are met. Typically, these conditions are that:
You must immediately notify your bank and the police of the loss or theft;
You had taken all reasonable steps to help recover or stop the use of the card; and
You did not cause or contribute to the loss or theft, and that the loss or theft is not due to your negligence or fraudulent act.
Fidrec says: “The adjudicator considers all relevant facts in deciding whether you have been negligent. Then he applies the law (usually, the terms and conditions between you and your card-issuing bank) to determine whether you are liable or not.”
Ms Choo says contacting the bank can be done via a 24/7 hotline. The bank can then block the card and arrange a replacement.
“The bank will begin an investigation to review the circumstances in which the card was lost, stolen or compromised and will consider waiving the $100 liability where the investigations find that the cardmember was a victim of crime and the customer can demonstrate he was not negligent,” she adds.
HACK #3: WHEN TO MAKE A REPORT
Mr Anthony Seow, head of cards and unsecured loans at DBS Bank, says most banks’ timeframes for disputes are within 90 days from the transaction date. So check your statements regularly and at least once a month.
With online/mobile banking, it’s easier to keep tabs on your card use so you can report any unauthorised transactions to your bank as soon as possible.
HACK #4: REPORTING DOESN’T ABSOLVE YOU OF LIABILITY
It’s a common misconception that just because you have made a report to the police and/or your bank as soon as you realised your card was missing, you are automatically not liable for fraudulent purchases made with it. Of course, you must make a police report and notify your bank immediately when you are aware of the loss. But you must also be able to show that you had taken reasonable care to safeguard your credit card at all times.
HACK #5: DEALING WITH PREPAYMENT ARRANGEMENTS AND DEFECTIVE GOODS AND SERVICES
Let’s assume you used your credit card to pay for your gym membership fees but the gym ceases operation and goes into liquidation.
You may think that asking your bank to refund you the balance of your fees is a breeze. Unfortunately, the bank might not be able to get your gym to do a charge-back, especially if it has no assets the liquidator can sell off, says Fidrec.
And even if you pay your bank by instalments, the outcome would still be the same, as your bank would have paid your gym in full anyway and you remain liable for the total amount, it added.
DBS’ Mr Seow adds that banks are not liable for any disputes related to defective goods or services. “Your first course of action should be to try and resolve your dispute with the merchant,” he adds.
“Failing which, you can proceed to file a dispute with your card-issuing bank. Make sure to provide your bank with documentary proof or evidence of the defective good or service so the bank can initiate a charge-back to the merchant.”
Fidrec says there is usually a term in the card agreement that your bank is not liable for any defect, deficiency, performance or quality of the goods or services supplied by the merchants.
“At adjudication at Fidrec, these terms and conditions between you and your bank would be relevant for determining liability. When you patronise a dubious merchant that eventually could not deliver, you may still be liable for the charges from that merchant,” it adds.
HACK #6: BEWARE OF TRICKS USED OVERSEAS
Mr Seow warns that when you are overseas, you may encounter the following situation: Your card is somehow retained by the ATM and nearby “customers” insist you key in your PIN to retrieve it.
“Do not listen to them – call your bank and have your card blocked immediately,” he says.
Fidrec also warns of some dubious practices of some overseas drinking establishments. Patrons have alleged they were forced to sign under duress (for example, under threat of physical harm) for exorbitant bills for drinks.
“At adjudication at Fidrec, your argument may not be enough to allow you to disclaim liability for the bill, especially if it was a ‘cardpresent’ transaction,” Fidrec says.
“These types of transactions are where both the cardholder and his microchip-embedded credit card are physically present at the point of sale. This makes it difficult to prove that the transactions were not made and authorised by the cardholder.”
HACK #7: STICK TO 3D SECURE SITES
For online shoppers, it’s best to stick to 3D Secure websites. You can identify these by their “Verified By Visa (VBV)” or “Secure- Code (MasterCard)” logos, says Mr Seow.
HACK #8: BEWARE OF PHISHING
Be on your guard if you receive any “verify or your account would expire” type of scam emails, especially if you have accounts with music/video download providers and so on.
Such e-mails typically ask for your credit card details, purportedly to authorise any future transactions.
If you respond and click on “verify now”, a one-time password (OTP) would be sent to your phone.
And should you key in the OTP, a fraudster at the other end would have successfully engineered a transaction.
Fidrec says: “You would have to persuade the adjudicator at Fidrec’s adjudication as to why you should not be held responsible for this transaction.”
Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.